Indian Prime Minister Narendra Modi has committed a $565 million line of credit to the Maldives to support the island nation’s infrastructure and development initiatives. It is indicating a significant strengthening of bilateral relations. The funds, announced during Modi’s official visit to the Maldives on July 25, 2025. They will be used to promote infrastructure, social initiatives, healthcare, housing, and defense strengthening in accordance with Maldivians’ preferences.
Modi stressed India’s role as the Maldives’ “most trusted friend” and “first responder”. This is highlighting the strategic importance of their alliance in the face of regional geopolitical competition, notably with China. Along with the credit line announcement, India and the Maldives began negotiations for a Free Trade Agreement (FTA). They also committed to complete a bilateral investment treaty quickly.
During his visit, Modi launched various India-backed development projects. It includes a new Defence Ministry headquarters in Malé, 3,300 housing units in Hulhumale, road and drainage upgrades in Addu City, and an extension of Hanimaadhoo International Airport supported by India. A significant financial relief includes a 40% reduction in the Maldives’ annual debt payback. That was obligations to India under current government-funded credit lines.
Maldivian President Mohamed Muizzu expressed gratitude for India’s pivotal support across sectors such as health, education, and security, reaffirming the strengthened partnership. The visit coincided with the Maldives’ 60th anniversary of independence. This marks a new chapter in the bilateral partnership aimed at promoting peace, stability, and prosperity in the Indian Ocean area. This $565 million credit line and the accompanying agreements are considered as a strategic triumph for India. It helps in boosting its influence in the Indian Ocean against rising rivalry from China and promoting the goals of India’s ‘Neighbourhood First’ and ‘MAHASAGAR’ maritime vision policies.
